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Putting my “Game Theory” hat and “Systems Thinking” hat. Given the “Law of Induced Demand”, can anyone here explain to me why cheap housing is possible? I wou

Putting my “Game Theory” hat and “Systems Thinking” hat. Given the “Law of Induced Demand”, can anyone here explain to me why cheap housing is possible? I would think that all these systems (as in, systems thinking) are functioning the way it supposed to be. Overpopulation will eventually result in population decline. Because it is too expensive, not enough space/resource, everyone wants the same location, jobs, etc. System oscillates.

ramraj07 4y ago
Because SV and Vancouver housing shortage is exacerbated by NIMBY zoning crap restricted by politics outside of your so-called capitalistic forces. Even if the system works as you say it would, is the outrageous human cost it entails just a detail for you? We are not trading transistors or currency notes, we are trading people. “Pricing a demographic out” means dislocating vulnerable families again and again as they desperately try to sustain and make an honest living. If we can devise a better system than this abattoir you describe, we owe it to any existing conscience to try and implement it. It’s only natural to feel like the system is working because you’ve been successful. It takes a better person than natural to think beyond how things have worked for them and try to think of the whole system and it’s participants.
- immigrantheart 4y ago
  When I mentioned “system is working” I mean system as in systems thinking. I edit my post to clarify. Please refer to that. I don’t live in SF or Bangalore. I also don’t own a property. I’m interested in this discussion, as I say, from Game Theory and Systems Thinking perspective. Lets refer to that.
  - ramraj07 4y ago
    I still gave my answer nonetheless. Capitalism and related “systems” don’t always (or ever?) work perfectly in human society. Because human nature is unnatural, driven by greed/emotions and illogical. See this great article explaining it in an engineering company sense: https://danluu.com/nothing-works/ https://danluu.com/nothing-works/
    - immigrantheart 4y ago
      My friend, you are exactly describing systems thinking… Greed is part of systems.
  - solarmist 4y ago
    Humans are not in fact rational actors which means most of our understanding of economics is deeply flawed.
- jollybean 4y ago
  Vancouver has built tower after tower after tower, it's not recognizable from 25 years go. Also - it's not the responsibility of local residents to demolish their homes and move into flats 'so you can live there'. The NIMBYism argument is rubbish as you have no right to influence or dictate the terms by which some other community wants to live. If people want to live in homes instead of jammed into skyscrapers Hong Kong pr NY style - which many would view as a horribly reduced quality of living - it's their choice. NY, HK - two of the most densely urban place in he world have not solved the 'housing crisis' - they're among the most expensive places in the world to live. That said, cost of living has skyrocketed far beyond what can be attributed to that - fairly high migration, a lot of foreign buyers (only 4% directly, but 'kids with citizenship using parents money' amounts to a big other cohort) and that is very easily enough to drive prices. Combined with low interest rates, an aging population with incredible voting power/influence, a booming economy and there you have it. 'Globalization' means SF and Van. basically are 'up for grabs' by everyone on the planet, not just locals. 1/2 of the real estate in the most posh parts of London are owned by foreigners for he very same reason. There needs to be a total rethink on how taxation works in those parameters. That said, it's rational: if a lot of talent wants in, prices will be higher. I don't know if 'artists' are going to be able to live there without some kind of very specific interventions. Other things, such as public transport can have a huge effect - if SF Bay were to be amalgamated into at least some kind of 'mega city' you might see high speed commuter trains. Imagine a very fast train from Stockton, Pleasanton, Gilroy, Santa Rosa - getting you to 'wherever' in the Bay area within 25 minutes? There's tons of real estate around the Bay Area, for artists, working class, middle class, regular folks, people who want 'big houses' etc.. it just not 'accessible' to the core. Or even micro/satellite offices as a civic mandate: building out offices that can be adjusted in size quickly, so that Salesforce, FB, Snap etc. will all have offices in San Jose, SF, Sacramento and bounce back and forth as needed.
  - klipt 4y ago
    Vancouver has crazy low property tax which explains the rampant speculation and unaffordability. And capital gains - without limit - aren't taxed for primary residences.
  - favflam 4y ago
- marcinzm 4y ago
  I think the point is that this possibly doesn't really matter and there is no level of building that will keep up. It's cheaper to move to SF than it is to build a house in SF and always will be. Allowing more housing won't help until you get to an very massive number of units as you'll simply have even more people moving in which will fuel the crisis even more until construction cannot keep up. Worse construction prices will skyrocket which will impact anyone wanting to do any renovation or maintenance (including existing landlords) which will drive rents up even more.
  - jt2190 4y ago
    > It's cheaper to move to [city] than it is to build a house in SF and always will be. This is exactly it. Further, attempts to preserve the current population size of a city and keep things the same as they are can only try to deprive newcomers of the infrastructure needed to support themselves (housing, transit, etc.), but not actually make it illegal for people to move in. And quite clearly, they will move in anyway. Even cities that try to adapt can only grow so quickly, as it takes time to build new infrastructure, but new arrivals can come at any time. In some ways I expect this problem will get worse, as the population of people who are decoupled from a particular location increases. “Work from home” is nearly the same thing as “work from anywhere”, and I expect that a lot of people will want their “anywhere” to be the currently trendy locale, and will throng from place to place.
- deleted 4y ago
  [deleted]
- nradov 4y ago
  A better system would be to create incentives for economic growth in other areas rather than trying to cram ever increasing numbers into a few limited existing urban areas.
  - lotsofpulp 4y ago
    Yes, if the goal is to bring prices of SF/NYC down, then make more SF/NYC. Of course, that type of dense land development is impossible in today’s legal/political/voting system.
    - newaccount2021 4y ago
- thatfrenchguy 4y ago
  > housing shortage is exacerbated by NIMBY zoning crap restricted by politics outside of your so-called capitalistic forces. I mean, there is a cultural aspect to it. I remember a few of my white American friends being shocked at the idea of raising kids in a condo, because « having a house and a yard » is the only way to have kids. Those people, I’m sure, will turn into nimbys in the future because « this housing is not for us ».
  - jelliclesfarm 4y ago
    Disclosure: I am a NIMBY. There is definitely a cultural gap here. Most immigrants value stable housing they can own and like minded community. Diversity occurs between different communities and not expected between every individual we interact with.. Social status is important. This is the Old World. Most immigrants start out as stateless or on uncertain visas with far away homes. The psychological need to own a home where it is your castle is very deep. Immigrants are almost always NIMBYs in America. I have examined the reasons why I am a NIMBY. And I am ok with it. Moving to another country and culture for economic reasons is rewarding on one hand but requires painful sacrifices. I have tried to explain this to Americans and those who didn’t have to leave their home countries and rebuild their identity and lives…some say they understand, but most don’t get it. That’s ok. There is nothing wrong with being YIMBY or NIMBY. Market forces will decide. I have also observed that most self declared YIMBYs become NIMBYs when they sign their first 30 year mortgage. The weight of a mortgage is heavy. Home ownership is not for everyone and it’s not a walk in the park. Those who willingly bear it will hedge their bets and fight for their investment. This is normal.
    - ramraj07 4y ago
      The issue with NIMBYism is it often builds structures around itself to insulate from change in the practices (local government incentives). Only top down mandates can break the cycle, but places like the US are not socialist enough to do that. Incidentally all my immigrant friends and relatives who do NIMBY arguments also vote republican and supported Trump. For what it’s worth.
      - 4y ago
inglor_cz 4y ago
Cheap housing is either substandard (see the phrase "Tofu dreg project" used in China [0]), or located in places that aren't very attractive (you can buy a whole house in a semi-abandoned Italian village for 1 euro [1]), or available during a certain time-limited period when some place started to grow rapidly (say, the Silicon Valley in the early 1980s), but not everyone realized it yet, so there is a window of opportunity there. People who bought property in San Francisco of the 19th century definitely bought them cheaply. [0] https://en.wikipedia.org/wiki/Tofu-dreg_project https://en.wikipedia.org/wiki/Tofu-dreg_project [1] https://1eurohouses.com/ https://1eurohouses.com/
bigDinosaur 4y ago
You're treating this as a system which changes states instantly. It does not. You can progressively build housing and expand a city such that you can keep prices stable, at least in theory, and 'affordable' (not a well defined word). In that sense 'overpopulation' is a deficient state which would not exist if not for heavy intervention against the natural response which would be to build at, more or less, the rate at which new residents are wanting to come. I'm not sure if there's a known limit to this, although I admit populations might oscillate a bit if SF with 100 million people is too unpleasant... That's not to say it's always bad to keep prices higher. Basic regulations do that (e.g. safety) and place a floor on the extent to which housing can truly be affordable without governments just forcing rent control and denying others the chance to live in a particular place entirely.
wilde 4y ago
Tokyo. It requires building way, way more units in more compact ways than Americans would currently be comfortable with.
- bobthepanda 4y ago
  Some Americans are certainly comfortable living in such situations (there’s no shortage of people creatively making it work in Manhattan, for instance, and tiny homes have a following and even TV shows) The problems are with pearl-clutching neighbors.
  - ROTMetro 4y ago
    You mean the problems are with people who bought their homes because of XYZ, which you now want to change out from under them, even though a PROMISE was made to those people by the Government in the form of the zoning rules in place. But rules that destroy what made a person's MOST VALUABLE asset VALUABLE to them shouldn't matter if that gets in the way of what YOU WANT, right? Their entire lives should be able to be disrupted, they should be forced from their home, because you no longer want to keep the promise made when they invested THEIR ENTIRE LIFE into their home. You want to move in and change the rules, just like the guy who guy who buys the house next to the airport then tries to get the airport shut down. You do know that you can, like, move to Manhattan, right? Sorry the little people are getting in the way of this great leap forward you wish to make at their expense. EDIT: Anyone who wants to force high density housing on others should ONLY be allowed to take vacations on community loving cruise ships. I mean, there is no valid reason to not want to vacation on cruise ships, and by putting all vacationers together it improves efficient, maximizes space, and reduced impact, right? That is the only acceptable vacation.
    - bobthepanda 4y ago
      All of these rules were put into place in the later half of the 20th century. This is a really recent development in the country’s history. These high density areas, and even many low density areas, have a housing shortage. A lot of the current inflation is being driven by rent. Now grown ups cannot buy homes in communities they’ve grown up in. Is the alternative supposed to be abandoning social networks or living in the streets?
renewiltord 4y ago
The answer, I think, is that given sufficient numbers sheer volumes can provide counteracting political power to rich minorities and their vassals. So cheap housing will arrive when those who do not benefit from economic rent seeking or exceptions to having rent extracted from them outnumber the rest. With high population growth, I think that's possible. It's also possible with economic collapse but I think the Bay Area is here to stay. Places have subcultures and SF's tech subculture is novelty. Even startup culture in NYC is mostly about industrializing the process of copying novelty: mostly the China approach.

ramraj07 4y ago

Because SV and Vancouver housing shortage is exacerbated by NIMBY zoning crap restricted by politics outside of your so-called capitalistic forces. Even if the system works as you say it would, is the outrageous human cost it entails just a detail for you? We are not trading transistors or currency notes, we are trading people. “Pricing a demographic out” means dislocating vulnerable families again and again as they desperately try to sustain and make an honest living. If we can devise a better system than this abattoir you describe, we owe it to any existing conscience to try and implement it. It’s only natural to feel like the system is working because you’ve been successful. It takes a better person than natural to think beyond how things have worked for them and try to think of the whole system and it’s participants.

immigrantheart 4y ago
When I mentioned “system is working” I mean system as in systems thinking. I edit my post to clarify. Please refer to that. I don’t live in SF or Bangalore. I also don’t own a property. I’m interested in this discussion, as I say, from Game Theory and Systems Thinking perspective. Lets refer to that.
- ramraj07 4y ago
  I still gave my answer nonetheless. Capitalism and related “systems” don’t always (or ever?) work perfectly in human society. Because human nature is unnatural, driven by greed/emotions and illogical. See this great article explaining it in an engineering company sense: https://danluu.com/nothing-works/ https://danluu.com/nothing-works/
  - immigrantheart 4y ago
    My friend, you are exactly describing systems thinking… Greed is part of systems.
- solarmist 4y ago
  Humans are not in fact rational actors which means most of our understanding of economics is deeply flawed.
jollybean 4y ago
Vancouver has built tower after tower after tower, it's not recognizable from 25 years go. Also - it's not the responsibility of local residents to demolish their homes and move into flats 'so you can live there'. The NIMBYism argument is rubbish as you have no right to influence or dictate the terms by which some other community wants to live. If people want to live in homes instead of jammed into skyscrapers Hong Kong pr NY style - which many would view as a horribly reduced quality of living - it's their choice. NY, HK - two of the most densely urban place in he world have not solved the 'housing crisis' - they're among the most expensive places in the world to live. That said, cost of living has skyrocketed far beyond what can be attributed to that - fairly high migration, a lot of foreign buyers (only 4% directly, but 'kids with citizenship using parents money' amounts to a big other cohort) and that is very easily enough to drive prices. Combined with low interest rates, an aging population with incredible voting power/influence, a booming economy and there you have it. 'Globalization' means SF and Van. basically are 'up for grabs' by everyone on the planet, not just locals. 1/2 of the real estate in the most posh parts of London are owned by foreigners for he very same reason. There needs to be a total rethink on how taxation works in those parameters. That said, it's rational: if a lot of talent wants in, prices will be higher. I don't know if 'artists' are going to be able to live there without some kind of very specific interventions. Other things, such as public transport can have a huge effect - if SF Bay were to be amalgamated into at least some kind of 'mega city' you might see high speed commuter trains. Imagine a very fast train from Stockton, Pleasanton, Gilroy, Santa Rosa - getting you to 'wherever' in the Bay area within 25 minutes? There's tons of real estate around the Bay Area, for artists, working class, middle class, regular folks, people who want 'big houses' etc.. it just not 'accessible' to the core. Or even micro/satellite offices as a civic mandate: building out offices that can be adjusted in size quickly, so that Salesforce, FB, Snap etc. will all have offices in San Jose, SF, Sacramento and bounce back and forth as needed.
- klipt 4y ago
  Vancouver has crazy low property tax which explains the rampant speculation and unaffordability. And capital gains - without limit - aren't taxed for primary residences.
- favflam 4y ago
marcinzm 4y ago
I think the point is that this possibly doesn't really matter and there is no level of building that will keep up. It's cheaper to move to SF than it is to build a house in SF and always will be. Allowing more housing won't help until you get to an very massive number of units as you'll simply have even more people moving in which will fuel the crisis even more until construction cannot keep up. Worse construction prices will skyrocket which will impact anyone wanting to do any renovation or maintenance (including existing landlords) which will drive rents up even more.
- jt2190 4y ago
  > It's cheaper to move to [city] than it is to build a house in SF and always will be. This is exactly it. Further, attempts to preserve the current population size of a city and keep things the same as they are can only try to deprive newcomers of the infrastructure needed to support themselves (housing, transit, etc.), but not actually make it illegal for people to move in. And quite clearly, they will move in anyway. Even cities that try to adapt can only grow so quickly, as it takes time to build new infrastructure, but new arrivals can come at any time. In some ways I expect this problem will get worse, as the population of people who are decoupled from a particular location increases. “Work from home” is nearly the same thing as “work from anywhere”, and I expect that a lot of people will want their “anywhere” to be the currently trendy locale, and will throng from place to place.
deleted 4y ago
[deleted]
nradov 4y ago
A better system would be to create incentives for economic growth in other areas rather than trying to cram ever increasing numbers into a few limited existing urban areas.
- lotsofpulp 4y ago
  Yes, if the goal is to bring prices of SF/NYC down, then make more SF/NYC. Of course, that type of dense land development is impossible in today’s legal/political/voting system.
  - newaccount2021 4y ago
thatfrenchguy 4y ago
> housing shortage is exacerbated by NIMBY zoning crap restricted by politics outside of your so-called capitalistic forces. I mean, there is a cultural aspect to it. I remember a few of my white American friends being shocked at the idea of raising kids in a condo, because « having a house and a yard » is the only way to have kids. Those people, I’m sure, will turn into nimbys in the future because « this housing is not for us ».
- jelliclesfarm 4y ago
  Disclosure: I am a NIMBY. There is definitely a cultural gap here. Most immigrants value stable housing they can own and like minded community. Diversity occurs between different communities and not expected between every individual we interact with.. Social status is important. This is the Old World. Most immigrants start out as stateless or on uncertain visas with far away homes. The psychological need to own a home where it is your castle is very deep. Immigrants are almost always NIMBYs in America. I have examined the reasons why I am a NIMBY. And I am ok with it. Moving to another country and culture for economic reasons is rewarding on one hand but requires painful sacrifices. I have tried to explain this to Americans and those who didn’t have to leave their home countries and rebuild their identity and lives…some say they understand, but most don’t get it. That’s ok. There is nothing wrong with being YIMBY or NIMBY. Market forces will decide. I have also observed that most self declared YIMBYs become NIMBYs when they sign their first 30 year mortgage. The weight of a mortgage is heavy. Home ownership is not for everyone and it’s not a walk in the park. Those who willingly bear it will hedge their bets and fight for their investment. This is normal.
  - ramraj07 4y ago
    The issue with NIMBYism is it often builds structures around itself to insulate from change in the practices (local government incentives). Only top down mandates can break the cycle, but places like the US are not socialist enough to do that. Incidentally all my immigrant friends and relatives who do NIMBY arguments also vote republican and supported Trump. For what it’s worth.
    - 4y ago

inglor_cz 4y ago

Cheap housing is either substandard (see the phrase "Tofu dreg project" used in China [0]), or located in places that aren't very attractive (you can buy a whole house in a semi-abandoned Italian village for 1 euro [1]), or available during a certain time-limited period when some place started to grow rapidly (say, the Silicon Valley in the early 1980s), but not everyone realized it yet, so there is a window of opportunity there. People who bought property in San Francisco of the 19th century definitely bought them cheaply. [0] https://en.wikipedia.org/wiki/Tofu-dreg_project https://en.wikipedia.org/wiki/Tofu-dreg_project [1] https://1eurohouses.com/ https://1eurohouses.com/

bigDinosaur 4y ago

You're treating this as a system which changes states instantly. It does not. You can progressively build housing and expand a city such that you can keep prices stable, at least in theory, and 'affordable' (not a well defined word). In that sense 'overpopulation' is a deficient state which would not exist if not for heavy intervention against the natural response which would be to build at, more or less, the rate at which new residents are wanting to come. I'm not sure if there's a known limit to this, although I admit populations might oscillate a bit if SF with 100 million people is too unpleasant... That's not to say it's always bad to keep prices higher. Basic regulations do that (e.g. safety) and place a floor on the extent to which housing can truly be affordable without governments just forcing rent control and denying others the chance to live in a particular place entirely.

wilde 4y ago

Tokyo. It requires building way, way more units in more compact ways than Americans would currently be comfortable with.

bobthepanda 4y ago
Some Americans are certainly comfortable living in such situations (there’s no shortage of people creatively making it work in Manhattan, for instance, and tiny homes have a following and even TV shows) The problems are with pearl-clutching neighbors.
- ROTMetro 4y ago
  You mean the problems are with people who bought their homes because of XYZ, which you now want to change out from under them, even though a PROMISE was made to those people by the Government in the form of the zoning rules in place. But rules that destroy what made a person's MOST VALUABLE asset VALUABLE to them shouldn't matter if that gets in the way of what YOU WANT, right? Their entire lives should be able to be disrupted, they should be forced from their home, because you no longer want to keep the promise made when they invested THEIR ENTIRE LIFE into their home. You want to move in and change the rules, just like the guy who guy who buys the house next to the airport then tries to get the airport shut down. You do know that you can, like, move to Manhattan, right? Sorry the little people are getting in the way of this great leap forward you wish to make at their expense. EDIT: Anyone who wants to force high density housing on others should ONLY be allowed to take vacations on community loving cruise ships. I mean, there is no valid reason to not want to vacation on cruise ships, and by putting all vacationers together it improves efficient, maximizes space, and reduced impact, right? That is the only acceptable vacation.
  - bobthepanda 4y ago
    All of these rules were put into place in the later half of the 20th century. This is a really recent development in the country’s history. These high density areas, and even many low density areas, have a housing shortage. A lot of the current inflation is being driven by rent. Now grown ups cannot buy homes in communities they’ve grown up in. Is the alternative supposed to be abandoning social networks or living in the streets?

renewiltord 4y ago

The answer, I think, is that given sufficient numbers sheer volumes can provide counteracting political power to rich minorities and their vassals. So cheap housing will arrive when those who do not benefit from economic rent seeking or exceptions to having rent extracted from them outnumber the rest. With high population growth, I think that's possible. It's also possible with economic collapse but I think the Bay Area is here to stay. Places have subcultures and SF's tech subculture is novelty. Even startup culture in NYC is mostly about industrializing the process of copying novelty: mostly the China approach.